Leighton on Track to Meet Profit Target

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Construction giant Leighton says it is on track to deliver a full year profit of up to $620 million after winning major infrastructure contracts including Sydney’s North West Rail Link.

The company made a net profit of $430 million in the nine months to September 30, down from $444 million in the same period last year.

Leighton said the previous year’s profit was boosted by one-off gains from the sale of 70 per cent of its telecommunications assets.

Chief executive Marcelino Fernandez Verdes said the company had produced a strong result in the third quarter of 2014, and was on track to deliver a full year underlying net profit between $540 and $620 million.

The company had improved its operating cash flow and reduced its net debt by $302 million in the quarter, he said.

Significant contracts were won during the quarter, including the operations, trains and systems package for the North West Rail Link, worth around $2 billion, as well as the Ravenhall Prison project in Victoria, worth $650 million.

“Within Australia, a significant overhaul of infrastructure is underway, with governments and the private sector investing in new projects and upgrading existing facilities,” Mr Fernandez Verdes said.

“Much of the work is occurring in sectors where Leighton has extensive experience, and this is translating into significant contract wins for the group.”

A restructure of Leighton’s businesses was on track for “substantial completion” by the end of 2014, he said.

Leighton launched a review of its operations in June, a month after German-based Hochtief increased its holding in the company to more than 70 per cent.

“The exploration of divestment and partnering opportunities for the services, properties and John Holland businesses is also well progressed,” Mr Fernandez Verdes said.

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